Common use of Subsequent Placements Clause in Contracts

Subsequent Placements. (a) From the date hereof until 90 Trading Days after the Effective Date, the Company will not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its equity or equity equivalent securities, including without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for Common Stock. (b) From the 90th Trading Day after the Effective Date until 12 months following the Effective Date, the Company shall not effect a financing of its Common Stock or Common Stock Equivalents (a “Subsequent Financing”) unless (i) the Company delivers to each of the Purchasers hereunder a written notice at least 5 Trading Days prior to the closing of such Subsequent Financing (the “Subsequent Financing Notice”) of its intention to effect such Subsequent Financing, which Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder, the Person with whom such Subsequent Financing is proposed to be effected, and attached to which shall be a term sheet or similar document relating thereto and (ii) such Purchaser shall not have notified the Company by 6:30 p.m. (New York City time) on the fifth (5th) Trading Day after its receipt of the Subsequent Financing Notice of its willingness to provide (or to cause its designee to provide), subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closing on the same terms set forth in the Subsequent Financing Notice. If one or more Purchasers shall fail to so notify the Company of their willingness to participate in the Subsequent Financing, the Company must provide such Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right to participate, subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closing, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 60 Trading Days after the date of the initial Subsequent Financing Notice with the Person identified in the Subsequent Financing Notice. (c) Notwithstanding anything to the contrary herein, this Section 4.4 shall not apply to the following: (i) the granting of options or restricted stock to employees, officers, directors and key consultants of the Company pursuant to any stock option plan or agreement duly adopted by the Company’s board of directors or a committee of directors established for such purpose, or (ii) the exercise of any security issued by the Company in connection with the offer and sale of the Company’s securities pursuant to this Agreement, or (iii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the date hereof, provided such securities have not been amended since the date hereof, or (iv) the issuance of securities in connection with a joint venture or development agreement or strategic partnership or similar agreement approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital, or (v) the issuance of securities in connection with an equipment lease financing transaction or a bank financing transaction approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital; (vi) the issuance of warrants to IRG or Xxxxxx and Xxxxxxx, Inc., or Shoreline Pacific LLC, or their respective assigns, in connection with the engagement letters dated February 13, 2003, July 8, 2003, and May 9, 2002, respectively, as amended to date; or (vii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding pursuant to subclauses (i), (iv), (v), and (vi) above.

Subsequent Placements. (a) From the date hereof until 90 Trading Days after the Effective Date, the Company will not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its equity or equity equivalent securities, including without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for Common Stock. (b) From the 90th Trading Day after the Effective Date until 12 18 months following the Effective Date, the Company shall not effect a financing of its Common Stock or Common Stock Equivalents (a “Subsequent Financing”) unless (i) the Company delivers to each of the Purchasers hereunder a written notice at least 5 Trading Days prior to the closing of such Subsequent Financing (the “Subsequent Financing Notice”) of its intention to effect such Subsequent Financing, which Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder, the Person with whom such Subsequent Financing is proposed to be effected, and attached to which shall be a term sheet or similar document relating thereto and (ii) such Purchaser shall not have notified the Company by 6:30 p.m. (New York City time) on the fifth (5th) Trading Day after its receipt of the Subsequent Financing Notice of its willingness to provide (or to cause its designee to provide), subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closing on the same terms set forth in the Subsequent Financing Notice. If one or more Purchasers shall fail to so notify the Company of their willingness to participate in the Subsequent Financing, the Company must provide such Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right to participate, subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closing, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 60 Trading Days after the date of the initial Subsequent Financing Notice with the Person identified in the Subsequent Financing Notice. (c) Notwithstanding anything to the contrary herein, this Section 4.4 shall not apply to the following: (i) the granting of options or restricted stock to employees, officers, directors and key consultants of the Company pursuant to any stock option plan or agreement duly adopted by the Company’s board of directors or a committee of directors established for such purpose, or (ii) the exercise of any security issued by the Company in connection with the offer and sale of the Company’s securities pursuant to this Agreement, or (iii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the date hereof, provided such securities have not been amended since the date hereof, or (iv) the issuance of securities in connection with a joint venture or development agreement or strategic partnership or similar agreement approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital, or (v) the issuance of securities in connection with an equipment lease financing transaction or a bank financing transaction approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital; (vi) the issuance of warrants to IRG or Xxxxxx and Xxxxxxx, Inc., or Shoreline Pacific LLC, or their respective assigns, in connection with the engagement letters dated February 13, 2003, and July 8, 2003, and May 9, 2002, respectively, as amended to date; or (vii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding pursuant to subclauses (i), (iv), (v), and (vi) above.

Subsequent Placements. (a) From the date hereof until 90 Trading Days after the Effective Date, the Company will not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its or the Subsidiaries’ equity or equity equivalent securities, including without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for Common StockStock or Common Stock Equivalents, other than issuances pursuant to clauses (A), (B) and (E) of the definition of Excluded Stock (any such offer, sale, grant, disposition or announcement being referred to as a “Subsequent Placement”). (b) From the 90th Effective Date until 30 Trading Day Days after the Effective Date until 12 months following (the Effective Date“Blockout Period”), the Company shall not will not, directly or indirectly, effect a financing of its Common Stock or Common Stock Equivalents (a “any Subsequent Financing”) unless (i) the Company delivers to each of the Purchasers hereunder a written notice at least 5 Trading Days prior to the closing of such Subsequent Financing (the “Subsequent Financing Notice”) of its intention to effect such Subsequent Financing, which Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder, the Person with whom such Subsequent Financing is proposed to be effected, and attached to which shall be a term sheet or similar document relating thereto and (ii) such Purchaser shall not have notified the Company by 6:30 p.m. (New York City time) on the fifth (5th) Trading Day after its receipt of the Subsequent Financing Notice of its willingness to provide (or to cause its designee to provide), subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closing on the same terms set forth in the Subsequent Financing Notice. If one or more Purchasers shall fail to so notify the Company of their willingness to participate in the Subsequent Financing, the Company must provide such Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right to participate, subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closing, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 60 Trading Days after the date of the initial Subsequent Financing Notice with the Person identified in the Subsequent Financing NoticePlacement except Excluded Stock. (c) Notwithstanding anything to The Blockout Period set forth in Section 4.5(b) above shall be extended for the contrary herein, this Section 4.4 shall not apply to the following: number of Trading Days during such period in which (i) trading in the granting of options or restricted stock to employeesCommon Stock is suspended by any Trading Market, officers, directors and key consultants of the Company pursuant to any stock option plan or agreement duly adopted by the Company’s board of directors or a committee of directors established for such purpose, or (ii) the exercise of any security issued by the Company in connection with the offer and sale of the Company’s securities pursuant to this AgreementRegistration Statement is not effective, or (iii) the exercise prospectus included in the Registration Statement may not be used by the Purchasers for the resale of Registrable Securities thereunder. (d) From the period beginning on the Effective Date and continuing for two hundred seventy (270) days thereafter, the Purchasers shall have the right to participate in any Subsequent Placement other than of Excluded Stock, in accordance with this Section 4.5(d). (i) The Company shall deliver to each Purchaser a verbal or conversion written notice (the “Offer”) of any convertible securitiesproposed or intended issuance or sale or exchange of the securities being offered (the “Offered Securities”) in a Subsequent Placement, options which Offer shall (w) identify and describe the Offered Securities, (x) describe the price and other terms upon which they are to be issued, sold or warrants issued exchanged, and outstanding the number or amount of the Offered Securities to be issued, sold or exchanged, (y) identify the Persons or entities to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (z) offer to issue and sell to each Purchaser (A) such Purchaser’s pro rata share of a number of additional securities of like kind to the Offered Securities (the “Participation Securities”) equal to one-half of the Offered Securities, based on such Purchaser’s pro rata portion of the date hereof, provided such securities have not been amended since the date hereof, or (iv) the issuance of securities in connection with a joint venture or development agreement or strategic partnership or similar agreement approved aggregate purchase price paid by the Company’s board Purchasers for all of directors, a primary purpose of which is not to raise equity capital, or the Shares purchased hereunder (v) the issuance of securities in connection with an equipment lease financing transaction or a bank financing transaction approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital; (vi) the issuance of warrants to IRG or Xxxxxx and Xxxxxxx, Inc., or Shoreline Pacific LLC, or their respective assigns, in connection with the engagement letters dated February 13, 2003, July 8, 2003, and May 9, 2002, respectively, as amended to date; or (vii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding pursuant to subclauses (i), (iv), (v“Basic Amount”), and (viB) with respect to each Purchaser that elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Purchasers as such Purchaser shall indicate it will purchase or acquire should the other Purchasers subscribe for less than their Basic Amounts (the “Undersubscription Amount”). (ii) To accept an Offer, in whole or in part, a Purchaser must (a) deliver a written notice to the Company prior to the end of the three (3) Trading Day period of the Offer, setting forth the portion of the Purchaser’s Basic Amount that such Purchaser elects to purchase and, if such Purchaser shall elect to purchase all of its Basic Amount, the Undersubscription Amount, if any, that such Purchaser elects to purchase (in either case, the “Notice of Acceptance”), (b) be able to make at the time of receiving the Offer and at the time of closing the purchase of the Participation Securities, the representations and warranties to the Company set forth in Section 3.2 of this Agreement with respect to the Offer and the Participation Securities, and (c) deliver to the Company such other agreements and documents required of the purchasers in the Subsequent Offering (the “Subsequent Placement Documents”). If the Basic Amounts subscribed for by all Purchasers are less than the total of all of the Basic Amounts, then each Purchaser who has set forth an Undersubcription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, that if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the “Available Undersubscription Amount”), each Purchaser who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Basic Amount of such Purchaser bears to the total Basic Amounts of all Purchasers that have subscribed for Undersubscription Amounts, subject to rounding by the Board of Directors to the extent its deems reasonably necessary. (iii) The Company shall have five (5) Trading Days from the expiration of the period set forth in Section 4.5(d)(ii) above to issue, sell or exchange all or any part of such Participation Securities as to which a Notice of Acceptance has not been given by the Purchasers (the “Refused Securities”), but only to the offerees described in the Offer and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer. (iv) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 4.5(d)(iii) above), then each Purchaser may, at its sole option and in its sole discretion, reduce the number or amount of the Participation Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Participation Securities that the Purchaser elected to purchase pursuant to Section 4.5(d)(ii) above multiplied by a fraction, (i) the numerator of which shall be the number or amount of Participation Securities the Company actually proposes to issue, sell or exchange (including Participation Securities to be issued or sold to Purchasers pursuant to Section 4.5(d)(ii) above prior to such reduction) and (ii) the denominator of which shall be the original amount of the Participation Securities. In the event that any Purchaser so elects to reduce the number or amount of Participation Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Participation Securities unless and until such securities have again been offered to the Purchasers in accordance with Section 4.5(d)(i) above. (v) Upon the closing of the issuance, sale or exchange of the Offered Securities, the Purchasers shall acquire from the Company, and the Company shall issue to the Purchasers, the number or amount of Participation Securities specified in the Notices of Acceptance, as reduced pursuant to Section 4.5(d)(iv) above if the Purchasers have so elected, upon the terms and conditions specified in the Offer. The purchase by the Purchasers of any Participation Securities is subject in all cases to the execution and delivery by the Company and the Purchasers of the Subsequent Placement Documents. Notwithstanding the delivery of a Notice of Acceptance, no Purchaser shall be required to purchase the Participation Securities unless such Subsequent Placement Documents are reasonably satisfactory in form and substance to the Purchasers and their respective counsel.

Subsequent Placements. (a) From Subject to Section 7.9 above, from the date hereof until 90 Trading Days after the Effective Date, the Company will not, directly agrees not to effect any private sale or indirectly, offer, sell, grant any option to purchase, or otherwise dispose distribution for its own account of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its equity or equity equivalent securities, including without limitation or any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, securities convertible into or exchangeable or exercisable for Common Stocksuch securities (a “Subsequent Placement”), unless the Company shall have first complied with this Section 7.10. (a) If the Company proposes to effect any Subsequent Offering, it shall give each Purchaser written notice of its intention, describing the securities offered (the “Offered Securities”), identify the persons or entities (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged, the price (or the anticipated mechanism for determining the price) and the terms and conditions upon which the Company proposes to issue the same (the “Notice”). (b) From Each Purchaser shall have ten (10) days from the 90th Trading Day after giving of such Notice (the Effective “Election Period”) to agree to purchase its “pro rata share” of the Offered Securities for the price and upon the terms and conditions specified in the Notice by providing written notice to the Company and stating therein the quantity of Offered Securities to be purchased. For purposes of this Section 7.10, each Purchaser’s “pro rata share” is equal to the ratio of (i) the number of Common Shares and Warrant Shares (assuming full exercise of the Warrants) which such Purchaser purchased on the Closing Date until 12 months to (ii) the total number of shares of the Company’s Common Stock (assuming full exercise of the Warrants) outstanding on the Closing Date. (c) The Company shall have ten (10) days following the Effective Dateexpiration of the Election Period to sell the Offered Securities in respect of which the Purchasers’ rights were not exercised or applicable (the “Eligible Securities”), but only to the offerees described in the Notice (if so described) and only at a price and upon general terms and conditions no more favorable to the purchasers thereof than specified in the Notice to the Purchasers pursuant to Section 7.10(a) hereof. If the Company has not sold such Offered Securities within ten (10) days following the expiration of the Election Period, the Company shall not thereafter effect a financing of its Common Stock or Common Stock Equivalents Subsequent Placement without first offering such Offered Securities in the manner provided above. (a “Subsequent Financing”d) unless (i) the Company delivers to each of the Purchasers hereunder a written notice at least 5 Trading Days prior to Upon the closing of such Subsequent Financing (the “Subsequent Financing Notice”) issuance, sale or exchange of its intention to effect such Subsequent Financing, which Subsequent Financing Notice shall describe in reasonable detail all or less than all of the proposed terms of such Subsequent FinancingEligible Securities, the amount of proceeds intended to be raised thereunder, the Person with whom such Subsequent Financing is proposed to be effected, and attached to which shall be a term sheet or similar document relating thereto and (ii) such Purchaser shall not have notified the Company by 6:30 p.m. (New York City time) on the fifth (5th) Trading Day after its receipt of the Subsequent Financing Notice of its willingness to provide (or to cause its designee to provide), subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closing on the same terms set forth in the Subsequent Financing Notice. If one or more Purchasers shall fail to so notify acquire from the Company of their willingness to participate in the Subsequent Financing, the Company must provide such Purchasers with a second Subsequent Financing NoticeCompany, and the Company shall issue to the Purchasers, the number or amount of Offered Securities specified in the notices of acceptance, upon the terms and conditions specified in the Notice. The purchase by the Purchasers will again have of any Offered Securities is subject in all cases to the right to participatepreparation, subject to completion execution and delivery by the Company and the Purchasers of mutually acceptable documentation, up to an amount equal a purchase agreement relating to such Purchaser’s Subscription Amount at the Closing, if the Subsequent Financing subject Offered Securities reasonable satisfactory in form and substance to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 60 Trading Days after the date of the initial Subsequent Financing Notice with the Person identified in the Subsequent Financing NoticePurchasers and their respective counsel. (ce) Notwithstanding anything contained herein to the contrary hereincontrary, the restrictions contained in this Section 4.4 7.10 shall not apply to the followingsale or distribution of the Company’s equity securities: (i) the granting upon exercise or conversion of any options or restricted stock other securities outstanding on the date hereof; (ii) in connection with any grant of options, warrants or the issuance of additional securities to employees, officers, directors and key or consultants of the Company pursuant to any a stock option plan or agreement stock purchase plan duly adopted by the Company’s board of directors or a committee of directors established for such purpose, or (ii) the exercise of any security issued by the Company and in connection with the offer and sale of the Company’s securities pursuant to this Agreement, or (iii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding effect on the date hereof, provided such securities have not been amended since the date hereof, or (iv) in respect of the issuance of securities the Company’s Common Stock upon exercise of any such securities; and (iii) in connection with a bona fide joint venture or development agreement or strategic partnership or similar agreement approved by partnership, the Company’s board of directors, a primary purpose of which is not to raise equity capital. In addition, the Company shall not be required to offer or (v) sell any Offered Securities to any Purchaser who would cause the issuance Company to be in violation of applicable federal securities in connection with an equipment lease financing transaction or a bank financing transaction approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital; (vi) the issuance of warrants to IRG or Xxxxxx and Xxxxxxx, Inc., or Shoreline Pacific LLC, or their respective assigns, in connection with the engagement letters dated February 13, 2003, July 8, 2003, and May 9, 2002, respectively, as amended to date; or (vii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding pursuant to subclauses (i), (iv), (v), and (vi) abovelaws.

Subsequent Placements. (a) From Prior to the date hereof until 90 expiration of the 30th Trading Days Day after the Effective DateDate (as extended hereunder), the Company shall not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of any of its or the Subsidiaries' equity or Common Stock Equivalents. (b) Except as set forth on Schedule 4.4(b) to the Disclosure Schedule, the Company shall not, prior to the expiration of the 30th Trading Day after the Effective Date (as extended hereunder), directly or indirectly, file a registration statement (other than on Form S-8 or pursuant to the Registration Rights Agreement) with the Commission with respect to any securities of the Company. (c) Notwithstanding the provisions of Section 4.4(a), the Company will not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) of any of its or the Subsidiaries' equity or equity equivalent securitiesCommon Stock Equivalents (such offer, including without limitation any debtsale, preferred stock grant, disposition or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for Common Stock. announcement being referred to as "Subsequent Placement") from the Closing Date -------------------- until the later of (bx) From the 90th Trading Day after the Effective Closing Date until 12 months and (y) the 30th Trading Day following the Effective Date, the Company shall not effect a financing of its Common Stock or Common Stock Equivalents (a “Subsequent Financing”) unless (i) the Company delivers to each of the Purchasers hereunder Purchaser a written notice at least 5 Trading Days prior to the closing of such Subsequent Financing (the “"Subsequent Financing Placement Notice”") of its --------------------------- intention to effect such Subsequent FinancingPlacement, which Subsequent Financing Placement Notice shall describe in reasonable detail the proposed terms of such Subsequent FinancingPlacement, the amount of proceeds intended to be raised thereunder, the Person with whom such Subsequent Financing Placement is proposed to be effected, and attached to which shall be a term sheet or similar document relating thereto and (ii) such Purchaser shall not have notified the Company by 6:30 p.m. (New York City time) on the fifth (5th) tenth Trading Day after its receipt of the Subsequent Financing Placement Notice of its willingness to provide (or to cause its designee to provide), subject to completion of mutually acceptable documentation, up all or part of such financing to an amount equal to such Purchaser’s Subscription Amount at the Closing Company on the same terms set forth in the Subsequent Financing Placement Notice. If one or more the Purchasers shall fail to so notify the Company of their willingness to participate in full in the Subsequent FinancingPlacement, the Company must may effect the remaining portion of such Subsequent Placement on the terms and to the Persons set forth in the Subsequent Placement Notice. The Company shall provide such the Purchasers with a second Subsequent Financing Notice, Placement Notice and the Purchasers will again have the right to participate, subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closingfirst refusal set forth in this Section 4.4(c), if the Subsequent Financing Placement subject to the initial Subsequent Financing Placement Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 60 30 Trading Days after the date of the initial Subsequent Financing Placement Notice with the Person identified in the Subsequent Financing Placement Notice. If the Purchasers indicate a willingness to provide financing in excess of the amount set forth in the Subsequent Placement Notice, then each Purchaser will be entitled to provide financing pursuant to such Subsequent Placement Notice up to an amount equal to such Purchaser's pro rata portion of the aggregate purchase price paid for the Securities under this Agreement, but the Company shall not be required to accept financing from the Purchasers in an amount in excess of the amount set forth in the Subsequent Placement Notice. (d) The 30 Trading Day-period set forth in Sections 4.4(a) and (b) above, and the 90 Trading Day- and 30 Trading Day-periods set forth in Section 4.4(c) above shall be extended for the number of Trading Days during such period in which (i) trading in the Common Stock is suspended by any Trading Market, or (ii) the Registration Statement is not effective or the prospectus included in the Registration Statement may not be used by the Purchasers for the resale of Shares and Warrant Shares. (e) The restrictions contained in Sections 4.4(a) and (c) Notwithstanding anything to the contrary herein, this Section 4.4 shall not apply to any grant or issuance by the Company of any of the following: : (i) any grant of an option or warrant for Common Stock or issuance of any shares of Common Stock upon the granting exercise of any options or restricted stock warrants to employees, officers, officers and directors and key of or consultants of to the Company pursuant to any stock option plan, employee stock purchase plan or agreement duly adopted similar plan or incentive or consulting arrangement approved by the Company’s 's board of directors or a committee of directors established for such purpose, or directors; (ii) any rights or agreements to purchase Common Stock or Common Stock Equivalents outstanding on the date hereof and as specified in Schedule 3.1(g) of the Disclosure Schedules (but not as to any amendments or other modifications to the number of Common Stock issuable thereunder, the terms set forth therein, or the exercise price set forth therein); (iii) any Common Stock or Common Stock Equivalents issued for consideration other than cash pursuant to a merger, consolidation, acquisition or other similar business combination; (iv) any issuances of Common Stock or Common Stock Equivalents to a Person in connection with a Strategic Transaction; and (v) any shares of Common Stock issued upon the exercise of the Warrant or any security similar warrant issued by the Company in connection with the offer and sale of the Company’s securities pursuant to this Agreement, or (iii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the date hereof, provided such securities have not been amended since the date hereof, or (iv) the issuance of securities in connection with a joint venture or development agreement or strategic partnership or similar agreement approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital, or (v) the issuance of securities in connection with an equipment lease financing transaction or a bank financing transaction approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital; (vi) the issuance of warrants to IRG or Xxxxxx and Xxxxxxx, Inc., or Shoreline Pacific LLC, or their respective assigns, in connection with the engagement letters dated February 13, 2003, July 8, 2003, and May 9, 2002, respectively, as amended to date; or (vii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding pursuant to subclauses (i), (iv), (v), and (vi) above.

Subsequent Placements. (a) From the date hereof until 90 Trading Days after the Effective Date, the Company will not, directly or indirectly, offer, sell, grant any option to purchaseoption, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its or the Subsidiaries' equity or equity equivalent securities, including without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for Common StockStock or Common Stock Equivalents (any such offer, sale, grant, disposition or announcement being referred to as a "Subsequent Placement"). (b) From the 90th Effective Date until the later of (i) 30 Trading Day Days after the Effective Date and (ii) the Company Stockholder Approval Date (the "Blackout Period"), the Company will not, directly or indirectly, effect any Subsequent Placement except as set forth in Section 4.6(e). From the date hereof until 12 months following the end of the Blackout Period, the Company will not, directly or indirectly, file any registration statement with the Commission other than the Registration Statement. (c) The Blackout Period set forth in Section 4.6(b) above shall be extended for the number of Trading Days during such period in which (i) trading in the Common Stock is suspended by any Trading Market, (ii) the Registration Statement is not effective, or (iii) the prospectus included in the Registration Statement may not be used by the Purchasers for the resale of Registrable Securities thereunder. (d) Until the later of (x) the end of the Blackout Period and (y) the one year anniversary of the Effective Date, the Company will not, directly or indirectly, effect any Subsequent Placement unless the Company shall not effect have first complied with this Section 4.6(d). (i) The Company shall deliver to each Purchaser an irrevocable written notice (the "Offer") of any proposed or intended issuance or sale or exchange of the securities being offered (the "Offered Securities") in a financing Subsequent Placement, which Offer shall (v) identify and describe the Offered Securities, (w) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (x) identify the Persons or entities to which or with which the Offered Securities are to be offered, issued, sold or exchanged, (y) enclose the substantially completed and negotiated purchase documents and (z) offer to issue and sell to or exchange with each Purchaser (A) a pro rata portion of fifty percent (50%) of the Offered Securities based on such Purchaser's pro rata portion of the aggregate principal amount of the Debentures purchased hereunder (the "Basic Amount"), and (B) with respect to each Purchaser that elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Purchasers as such Purchaser shall indicate it will purchase or acquire should the other Purchasers subscribe for less than their Basic Amounts (the "Undersubscription Amount"), which process shall be repeated until the Purchasers shall have an opportunity to subscribe for any remaining Undersubscription Amount. (ii) To accept an Offer, in whole or in part, a Purchaser must deliver a written notice to the Company prior to the end of the five (5) Trading Day period after such Purchaser's receipt of the Offer Notice (the "Offer Period"), setting forth the portion of the Purchaser's Basic Amount that such Purchaser elects to purchase (the "Requested Amounts") and, if such Purchaser shall elect to purchase all of its Common Stock Basic Amount, the Undersubscription Amount, if any, that such Purchaser elects to purchase (in either case, the "Notice of Acceptance"). If the Requested Amounts subscribed for by all Purchasers are less than the total of all of the Basic Amounts, then each Purchaser who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Requested Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, that if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Basic Amounts and the Requested Amounts subscribed for (the "Available Undersubscription Amount"), each Purchaser who has subscribed for any Undersubscription Amount shall be entitled to purchase up to that portion of the Available Undersubscription Amount as the Basic Amount of such Purchaser bears to the total Basic Amounts of all Purchasers that have subscribed for Undersubscription Amounts, subject to rounding by the board of directors to the extent its deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or Common Stock Equivalents amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to the Purchasers a new Offer Notice and the Offer Period shall expire on the third (3rd) Business Day after such Purchaser's receipt of such new Offer Notice. (iii) The Company shall have five (5) Trading Days from the expiration of the Offer Period above to (i) issue, sell or exchange all or any part of such Offered Securities as to which a “Notice of Acceptance has not been given by the Purchasers (the "Unsubscribed Securities") pursuant to a definitive agreement(s) (the "Subsequent Financing”Placement Agreement"), and only upon terms and conditions (including, without limitation, unit prices and interest rates) unless that are not more favorable to the acquiring person or persons or less favorable to the Company than those set forth in the Offer Notice and (ii) to publicly announce (a) the execution of such Subsequent Placement Agreement, and (b) either (x) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (y) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto. (iv) In the event the Company shall propose to sell less than all the Unsubscribed Securities (any such sale to be in the manner and on the terms specified in Section 4.6(d)(iii) above), then each Purchaser may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that the Purchaser elected to purchase pursuant to Section 4.6(d)(ii) above multiplied by a fraction, (i) the Company delivers to each numerator of the Purchasers hereunder a written notice at least 5 Trading Days prior to the closing of such Subsequent Financing (the “Subsequent Financing Notice”) of its intention to effect such Subsequent Financing, which Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder, the Person with whom such Subsequent Financing is proposed to be effected, and attached to which shall be a term sheet the number or similar document relating thereto amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Purchasers pursuant to Section 4.6(c)(ii) above prior to such reduction) and (ii) such the denominator of which shall be the original amount of the Offered Securities. In the event that any Purchaser shall not have notified so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company by 6:30 p.m. (New York City time) on may not issue, sell or exchange more than the fifth (5th) Trading Day after its receipt reduced number or amount of the Subsequent Financing Notice Offered Securities unless and until such securities have again been offered to the Purchasers in accordance with Section 4.6(d)(i) above. (v) Upon the closing of its willingness the issuance, sale or exchange of all or less than all of the Unsubscribed Securities, the Purchasers shall acquire from the Company, and the Company shall issue to provide the Purchasers, the number or amount of Offered Securities specified in the Notices of Acceptance, as reduced pursuant to Section 4.6(d)(iv) above if the Purchasers have so elected, upon the terms and conditions specified in the Offer. Notwithstanding anything to the contrary contained in this Agreement, if the Company does not consummate the closing of the issuance, sale or exchange of all or less than all of the Unsubscribed Securities, within five (5) Business Days of the expiration of the Offer Period, the Company shall issue to the Purchasers, the number or amount of Offered Securities specified in the Notices of Acceptance, as reduced pursuant to cause its designee Section 4.6(d)(iv) above if the Purchasers have so elected, upon the terms and conditions specified in the Offer. The purchase by the Purchasers of any Offered Securities is subject in all cases to provide), subject to completion the execution and delivery by the Company and the Purchasers of mutually acceptable documentation, up to an amount equal the purchase agreement relating to such Purchaser’s Subscription Amount at the Closing on the same terms set forth Offered Securities substantially in the Subsequent Financing Notice. If one form delivered to the Purchasers and their respective counsel with the Offer. (vi) Any Offered Securities not acquired by the Purchasers or more other persons in accordance with Section 4.6(d)(iii) above may not be issued, sold or exchanged until they are again offered to the Purchasers shall fail to so notify under the procedures specified in this Agreement. (vii) The Company of their willingness and the Purchasers agree that if any Purchaser elects to participate in the Offer, (x) neither the Subsequent FinancingPlacement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the "Subsequent Placement Documents") shall include any term or provisions whereby any Purchaser shall be required to agree to any restrictions in trading as to any securities of the Company must provide owned by such Purchasers with a second Purchaser prior to such Subsequent Financing NoticePlacement, and the Purchasers will again have the right to participate, subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closing, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for (y) any reason on the terms registration rights set forth in such Subsequent Financing Notice within 60 Trading Days after Placement Documents shall be similar in all material respects to the date of the initial Subsequent Financing Notice with the Person identified registration rights contained in the Subsequent Financing Noticethis Agreement. (cviii) Notwithstanding anything to the contrary herein, in this Section 4.4 4.6 and unless otherwise agreed to by the Purchasers, the Company shall either confirm in writing to the Purchasers that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case in such a manner such that the Purchasers will not be in possession of material non-public information, by the fifteen (15th) Business Day following delivery of the Offer Notice. If by the fifteen (15th) following delivery of the Offer Notice no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by the Purchasers, such transaction shall be deemed to have been abandoned and the Purchasers shall not be deemed to be in possession of any material, non-public information with respect to the Company. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide each Purchaser with another Offer Notice and each Purchaser will again have the right of participation set forth in this Section 4.6. The Company shall not be permitted to deliver more than one such Offer Notice to the Purchasers in any 60 day period. (e) The restrictions contained in this Section 4.6 shall not apply to the following: (i) the granting of options or restricted stock to employees, officers, directors and key consultants of the Company pursuant to any stock option plan or agreement duly adopted by the Company’s board of directors or a committee of directors established for such purpose, or (ii) the exercise of any security issued by the Company in connection with the offer and sale of the Company’s securities pursuant to this Agreement, or (iii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the date hereof, provided such securities have not been amended since the date hereof, or (iv) the issuance of securities in connection with a joint venture or development agreement or strategic partnership or similar agreement approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital, or (v) the issuance of securities in connection with an equipment lease financing transaction or a bank financing transaction approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital; (vi) the issuance of warrants to IRG or Xxxxxx and Xxxxxxx, Inc., or Shoreline Pacific LLC, or their respective assigns, in connection with the engagement letters dated February 13, 2003, July 8, 2003, and May 9, 2002, respectively, as amended to date; or (vii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding pursuant to subclauses (i), (iv), (v), and (vi) aboveExcluded Stock.

Subsequent Placements. (a) From Prior to the date hereof until 90 expiration of the 30/th/ Trading Days Day after the Effective Date (as extended hereunder), the Company shall not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of any of Common Stock or Common Stock Equivalents.) (b) Prior to the expiration of the 30/th/ Trading Day after the Effective Date (as extended hereunder), the Company shall not, directly or indirectly, file a registration statement (other than on Form S-8 or pursuant to the Registration Rights Agreement) with the Commission with respect to any securities of the Company. (c) Prior to the expiration of the first anniversary of the Closing Date, the Company will not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) of any of its equity or equity equivalent securities, including without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for Common Stock. (b) From the 90th Trading Day after the Effective Date until 12 months following the Effective Date, the Company shall not effect a financing of its Common Stock or Common Stock Equivalents or any of its Subsidiaries' equity or Common Stock Equivalents (a “such offer, sale, grant, disposition or announcement being referred to as "Subsequent Financing”) Placement"), unless -------------------- (i) the Company delivers to each of the Purchasers hereunder Purchaser a written notice at least 5 Trading Days prior to the closing of such Subsequent Financing (the “"Subsequent Financing ---------- Placement Notice”") of its intention to effect such Subsequent FinancingPlacement, which ---------------- Subsequent Financing Placement Notice shall describe in reasonable detail the proposed terms of such Subsequent FinancingPlacement, the amount of proceeds intended to be raised thereunder, the Person with whom such Subsequent Financing Placement is proposed to be effected, and attached to which shall be a term sheet or similar document relating thereto and (ii) such Purchaser shall not have notified the Company by 6:30 p.m. (New York City time) on the fifth (5th) tenth Trading Day after its receipt of the Subsequent Financing Placement Notice of its willingness to provide (or to cause its designee to provide), subject to completion of mutually acceptable documentation, up all or part of such financing to an amount equal to such Purchaser’s Subscription Amount at the Closing Company on the same terms set forth in the Subsequent Financing Placement Notice. If one or more the Purchasers shall fail to so notify the Company of their willingness to participate in full in the Subsequent FinancingPlacement, the Company must may effect the remaining portion of such Subsequent Placement on the terms and to the Persons set forth in the Subsequent Placement Notice. The Company shall provide such the Purchasers with a second Subsequent Financing Notice, Placement Notice and the Purchasers will again have the right to participate, subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closingfirst refusal set forth in this Section 4.4(c), if the Subsequent Financing Placement subject to the initial Subsequent Financing Placement Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 60 30 Trading Days after the date of the initial Subsequent Financing Placement Notice with the Person identified in the Subsequent Financing Placement Notice. If the Purchasers indicate a willingness to provide financing in excess of the amount set forth in the Subsequent Placement Notice, then each Purchaser will be entitled to provide financing pursuant to such Subsequent Placement Notice up to an amount equal to such Purchaser Percentage of the financing, but the Company shall not be required to accept financing from the Purchasers in an amount in excess of the amount set forth in the Subsequent Placement Notice. (d) The 30 Trading Day-period set forth in Sections 4.4(a) and (b) above and the one-year period set forth in Section 4.4(c) shall be extended for the number of Trading Days during such period in which (i) trading in the Common Stock is suspended by any Trading Market, or (ii) following the Effective Date, the Registration Statement is not effective or the prospectus included in the Registration Statement may not be used by the Purchasers for the resale of the Underlying Shares. (e) The restrictions contained in Sections 4.4(a) and (c) Notwithstanding anything to the contrary herein, this Section 4.4 shall not apply to any grant or issuance by the Company of any of the following: : (i) any grant of an option or warrant for Common Stock or issuance of any shares of Common Stock upon the granting exercise of any options or restricted stock warrants to employees, officers, officers and directors and key of or consultants of to the Company pursuant to any stock option plan, employee stock purchase plan or agreement duly adopted by the Company’s board of directors similar plan or a committee of directors established for such purpose, incentive or (ii) the exercise of any security issued by the Company in connection with the offer and sale of the Company’s securities pursuant to this Agreement, or (iii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the date hereof, provided such securities have not been amended since the date hereof, or (iv) the issuance of securities in connection with a joint venture or development agreement or strategic partnership or similar agreement consulting arrangement approved by the Company’s 's board of directors; (g) (but not as to any amendments or other modifications to the number of ------ Common Stock issuable thereunder, a primary purpose of which is not to raise equity capitalthe terms set forth therein, or (v) the issuance of securities in connection with an equipment lease financing transaction or a bank financing transaction approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital; (vi) the issuance of warrants to IRG or Xxxxxx and Xxxxxxx, Inc., or Shoreline Pacific LLC, or their respective assigns, in connection with the engagement letters dated February 13, 2003, July 8, 2003, and May 9, 2002, respectively, as amended to date; or (vii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding pursuant to subclauses (iprice set forth therein), (iv), (v), and (vi) above.;

Subsequent Placements. (a) From the date hereof until 90 Trading Days after the Effective Date, the Company will not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its equity or equity equivalent securities, including without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for Common Stock. (b) From the 90th Trading Day after the Effective Date until 12 months following the Effective Date, the Company shall not effect a financing of its Common Stock or Common Stock Equivalents (a “"Subsequent Financing”") unless (i) the Company delivers to each of the Purchasers hereunder a written notice at least 5 Trading Days prior to the closing of such Subsequent Financing (the “"Subsequent Financing Notice”") of its intention to effect such Subsequent Financing, which Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder, the Person with whom such Subsequent Financing is proposed to be effected, and attached to which shall be a term sheet or similar document relating thereto and offer to each Purchaser the opportunity to provide (or cause its designee to provide) up to an amount equal to such Purchaser's Subscription Amount at the Closing on the same terms set forth in the Subsequent Financing Notice and (ii) such Purchaser shall not have notified the Company by 6:30 p.m. (New York City time) on the fifth (5th) Trading Day after its receipt of the Subsequent Financing Notice of its willingness to provide (or to cause its designee to provide), subject to completion of mutually acceptable documentation, up to an amount equal to the proportion of the aggregate Subscription Amounts represented by such Purchaser’s 's Subscription Amount at the Closing on the same terms set forth in the Subsequent Financing Notice. If one or more Purchasers shall fail to so notify the Company of their willingness to participate in the Subsequent Financing, the Company must provide such the other Purchasers with a second Subsequent Financing Notice, and the those Purchasers will again have the right to participate, subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s their proportions of the Subscription Amount at the Closing, if Amounts of participating Purchasers. If the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 60 Trading Days after the date of the initial Subsequent Financing Notice with the Person identified in the Subsequent Financing Notice, the Company must provide another initial Financing Note prior to any subsequent financing, until 12 months following the Effective Date. (c) Notwithstanding anything to the contrary herein, this Section 4.4 shall not apply to the following: (i) the granting of options or restricted stock to employees, officers, directors and key consultants of the Company pursuant to any stock option plan or agreement duly adopted by the Company’s 's board of directors by vote of a majority of the independent members of the board or a committee of independent directors established for such purpose, or (ii) the exercise of any security issued by the Company in connection with the offer and sale of the Company’s 's securities pursuant to this Agreement, or (iii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the date hereof, provided such securities have not been amended since the date hereof, or (iv) the issuance of securities in connection with a joint venture or development agreement or strategic partnership or similar agreement approved by the Company’s 's board of directors, a primary no significant purpose of which is not to raise equity capital, or (v) the issuance of securities in connection with an equipment lease financing transaction or a bank financing transaction approved by the Company’s 's board of directors, a primary no significant purpose of which is not to raise equity capital; or (vi) the issuance of warrants to IRG or Xxxxxx and Xxxxxxx, Inc., or Shoreline Pacific LLC, or their respective assigns, in connection with the engagement letters dated February 13, 2003, July 8, 2003, and May 9, 2002, respectively, as amended to date; or (vii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding pursuant to subclauses (i), (iv), ) and (v), and (vi) above.

Subsequent Placements. (a) From the date hereof until 90 Trading Days after the Effective Date, the Company will not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its equity or equity equivalent securities, including without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for Common Stock. (b) From the 90th Trading Day after the Effective Date until 12 6 months following after the Effective Date, upon any financing by the Company shall not effect a financing of its Common Stock or Common Stock Equivalents (a “Subsequent Financing”) unless ), each Purchaser shall have the right to participate, subject to completion of mutually acceptable documentation, in up to an amount of such Subsequent Financing equal to such Purchaser’s initial Subscription Amount (i) the Company delivers to each of the Purchasers hereunder a written notice at “Participation Maximum”). At least 5 Trading Days prior to the closing of such the Subsequent Financing, the Company shall deliver to each Purchaser a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”) ). Upon the request of its intention a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but no later than 1 Trading Day after such request, deliver a Subsequent Financing Notice to effect such Subsequent Financing, which Purchaser. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder, the Person with whom such Subsequent Financing is proposed to be effected, and attached to which shall be a term sheet or similar document relating thereto and (ii) such Purchaser shall not have notified the Company thereto. If by 6:30 p.m. (New York City time) on the fifth (5th) Trading Day after its receipt all of the Purchasers have received the Pre-Notice, notifications by the Purchasers of their willingness to participate in the Subsequent Financing Notice of its willingness to provide (or to cause its designee their designees to provide)participate) is, subject to completion in the aggregate, less than the total amount of mutually acceptable documentationthe Subsequent Financing, up to an amount equal to then the Company may effect the remaining portion of such Purchaser’s Subscription Amount at the Closing Subsequent Financing on the same terms and to the Persons set forth in the Subsequent Financing Notice. If one or more Purchasers shall fail to so notify the Company of their willingness to participate in the Subsequent Financing, the Company must provide such Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right to participate, subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closing, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within 60 Trading Days after the date of the initial Subsequent Financing Notice with the Person identified in the Subsequent Financing Notice. (c) Notwithstanding anything to the contrary herein, this Section 4.4 shall not apply to the following: (i) the granting of options or restricted stock to employees, officers, directors and key consultants of the Company pursuant to any stock option plan or agreement duly adopted by the Company’s board of directors or a committee of directors established for such purpose, or (ii) the exercise of any security issued by the Company in connection with the offer and sale of the Company’s securities pursuant to this Agreement, or (iii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the date hereof, provided such securities have not been amended since the date hereof, or (iv) the issuance of securities in connection with a joint venture or development agreement or strategic partnership or similar agreement approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital, or (v) the issuance of securities in connection with an equipment lease financing transaction or a bank financing transaction approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital; (vi) the issuance of warrants to IRG or Xxxxxx and Xxxxxxx, Inc., or Shoreline Pacific LLC, or their respective assigns, in connection with the engagement letters dated February 13, 2003, July 8, 2003, and May 9, 2002, respectively, as amended to date; or (vii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding pursuant to subclauses (i), (iv), (v), and (vi) above.

Subsequent Placements. (a) From the date hereof until 90 Trading Days after the Effective Date, the Company will not, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its or, except with the prior written consent of the holders of a majority in principal amount of the Debenture, the Subsidiaries' equity or equity equivalent securities, including without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for Common StockStock (any such offer, sale, grant, disposition or announcement being referred to as a "SUBSEQUENT PLACEMENT"). (b) From The Company will not, directly or indirectly, effect any Subsequent Placement from the 90th date hereof until 180 Trading Day Days after the Effective Date until 12 months following the Effective Date, the Company shall not effect a financing of its Common Stock or Common Stock Equivalents (a “Subsequent Financing”) unless (i) the Company delivers to each of the Purchasers hereunder a written notice at least 5 Trading Days prior to the closing of such Subsequent Financing (the “Subsequent Financing Notice”"SUBSEQUENT PLACEMENT NOTICE") of its intention to effect such Subsequent FinancingPlacement, which Subsequent Financing Placement Notice shall describe in reasonable detail the proposed terms of such Subsequent FinancingPlacement, the amount of proceeds intended to be raised thereunder, the Person with whom such Subsequent Financing Placement is proposed to be effected, and attached to which shall be a term sheet or similar document relating thereto and (ii) such Purchaser shall not have notified the Company by 6:30 p.m. (New York City time) on the fifth (5th) tenth Trading Day after its receipt of the Subsequent Financing Placement Notice of its willingness to provide (or to cause its designee to provide), subject to completion of mutually acceptable documentation, up financing to an amount equal to such Purchaser’s Subscription Amount at the Closing Company on the same terms set forth in the Subsequent Financing Placement Notice. If one or more the Purchasers shall fail to so notify the Company of their willingness to participate in the full Subsequent FinancingPlacement, the Company may effect such Subsequent Placement on the terms and to the Persons set forth in the Subsequent Placement Notice; provided that the Company must provide such the Purchasers with a second Subsequent Financing Placement Notice, and the Purchasers will again have the right to participate, subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closingfirst refusal set forth above in this paragraph (b), if the Subsequent Financing Placement subject to the initial Subsequent Financing Placement Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Placement Notice within 60 30 Trading Days after the date of the initial Subsequent Financing Placement Notice with the Person identified in the Subsequent Financing Placement Notice. If the Purchasers indicate a willingness to provide financing in excess of the amount set forth in the Subsequent Placement Notice, then each Purchaser will be entitled to provide financing pursuant to such Subsequent Placement Notice up to an amount equal to such Purchaser's pro rata portion of the aggregate purchase price paid for the Securities under this Agreement, but the Company shall not be required to accept financing from the Purchasers in an amount in excess of the amount set forth in the Subsequent Placement Notice. (c) Notwithstanding anything Except for (i) Registrable Securities, as defined in the Registration Rights Agreement, and (ii) Common Stock permitted to be issued pursuant to Section 4.7(e), the contrary hereinCompany shall not, until 90 Trading Days after the Effective Date, without the prior written consent of the Purchasers, (A) issue or sell any of its or any of its Affiliates' equity or equity-equivalent securities pursuant to Regulation S promulgated under the Securities Act, or (B) file a registration statement with the Commission with respect to any securities of the Company or the Subsidiaries. (d) The 90 and 180 Trading Day periods set forth in the foregoing paragraphs of this Section 4.4 4.7 shall be extended for (i) the number of Trading Days during such periods in which trading in the Common Stock is suspended by any Trading Market, and (ii) the number of Trading Days after the Effective Date during which (A) the Underlying Shares Registration Statement is not effective or (B) the prospectus included in the Underlying Shares Registration Statement may not be used by the holders thereof for the resale of Registrable Securities thereunder. (e) The restrictions contained in paragraphs (a) and (b) of this Section 4.7 shall not apply to the following: (i) the granting of options or restricted stock to employees, officers, officers and directors and key consultants of the Company or bona fide consultants for services rendered other than in connection with financing activities pursuant to any stock option plan or agreement duly adopted by the Company’s board Company or to the issuance of directors or a committee Common Stock upon exercise of directors established for such purpose, or options; (ii) the exercise issuance of any security issued by the Company Common Stock or securities convertible into Common Stock in connection with the offer and sale of the Company’s securities pursuant to this Agreement, or a Strategic Transaction; (iii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the date hereof, provided such securities have not been amended since the date hereof, or (iv) the issuance of securities in connection with a joint venture or development agreement or strategic partnership or similar agreement approved by the Company’s board up to an aggregate 100,000 shares of directors, a primary purpose of which is not to raise equity capital, or (v) the issuance of securities in connection with an equipment lease financing transaction or a bank financing transaction approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital; (vi) the issuance of warrants to IRG or Xxxxxx and Xxxxxxx, Inc., or Shoreline Pacific LLC, or their respective assigns, in connection with the engagement letters dated February 13, 2003, July 8, 2003, and May 9, 2002, respectively, as amended to date; or (vii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding pursuant to subclauses (i), (iv), (v), and (vi) above.Common

Subsequent Placements. (a) From the date hereof Closing Date until 90 Trading Days after the Effective 540th day following the Closing Date, if the Company will notCompany, directly or indirectly, plans to offer, sell, grant any option to purchase, or otherwise dispose of (or announce announces any offer, sale, grant or any option to purchase or other disposition of) any of its equity or equity equivalent securities, including without limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for Common Stock. (b) From the 90th Trading Day after the Effective Date until 12 months following the Effective Date, the Company shall not effect a financing of its Common Stock or any Common Stock Equivalents (a “"Subsequent Financing”) unless (i) Placement"), then the Company delivers shall provide to each of the Purchasers hereunder a written notice at least 5 Trading Days which shall include a term sheet of the material terms thereof (the "Subsequent Placement Notice"), not less than 10 calendar days prior to the closing intended date of consummation of such Subsequent Financing (the “Subsequent Financing Notice”) Placement, of its intention to effect such Subsequent Financing, which Placement. If on the date of receipt by the Purchasers of the Subsequent Financing Placement Notice shall describe in reasonable detail (the proposed terms of such "Subsequent FinancingPlacement Notice Date"), the Closing Price is greater than the Market Price, each Purchaser shall have the right to participate on a pro-rata basis in the Subsequent Placement for an investment amount equal to the greater of proceeds intended to be raised thereunder, (i) 21% of the Person with whom aggregate purchase price of the securities offered in the Subsequent Placement multiplied by such Subsequent Financing is proposed to be effected, and attached to which shall be a term sheet or similar document relating thereto Purchaser's Holdings Percentage and (ii) $5,000,000 multiplied by such Purchaser's Holdings Percentage. If on the Subsequent Placement Notice Date, the Closing Price is equal to or lower than the Market Price, each Purchaser shall not have notified the Company by 6:30 p.m. (New York City time) on the fifth (5th) Trading Day after its receipt of the Subsequent Financing Notice of its willingness right to provide (or to cause its designee to provide), subject to completion of mutually acceptable documentation, up to participate for an investment amount equal to such Purchaser’s Subscription Amount at the Closing on greater of (i) 50% of the same terms set forth aggregate purchase price of the securities offered in the Subsequent Financing NoticePlacement multiplied by such Purchasers' Holdings Percentage and (ii) $5,000,000 multiplied by such Purchaser's Holdings Percentage. Purchasers electing to participate in a Subsequent Placement under this Section 4.12(a) shall notify the Company not later than the tenth calendar day following the Subsequent Placement Notice Date. If one or more the Purchasers shall fail to so notify the Company of their willingness to participate in the Subsequent FinancingPlacement, the Company may effect such Subsequent Placement on the terms and to the Persons set forth in the Subsequent Placement Notice, provided, that the Company must provide such the Purchasers with a second Subsequent Financing Notice, Placement Notice and the Purchasers will again have the right to participate, subject to completion of mutually acceptable documentation, up to an amount equal to such Purchaser’s Subscription Amount at the Closingfirst refusal set forth above in this Section 4.12(a), if the Subsequent Financing Placement subject to the initial Subsequent Financing Placement Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Placement Notice within 60 Trading Days 45 days after the date of the initial Subsequent Financing Placement Notice Date with the Person identified in the Subsequent Financing Placement Notice. (cb) Notwithstanding anything The Purchasers right to the contrary herein, this participate in a Subsequent Placement under Section 4.4 4.12(a) shall not apply to the followingto: (i) any issuance of Common Stock or Common Stock Equivalents in connection with the granting acquisition by the Company of all or substantially all of the securities or assets of another entity, (ii) a bona fide underwritten public offering of the Common Stock with gross proceeds to the Company in excess of $30,000,000 (which shall not include equity lines of credit or similar transactions), (iii) any grant of options or restricted stock Common Stock to employees, officers, officers or directors and key or bona fide consultants of the Company pursuant to any stock option incentive plan or agreement duly adopted by the Company’s 's board of directors or a committee in respect of directors established for such purpose, or (ii) the issuance of Common Stock upon exercise of any security issued by the Company in connection with the offer and sale of the Company’s securities pursuant to this Agreementsuch options, or (iii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the date hereof, provided such securities have not been amended since the date hereof, or (iv) the issuance of securities in connection with a joint venture or development agreement or strategic partnership or similar agreement approved by any Common Stock sold under the Company’s board of directors's employee stock purchase plan, a primary purpose of which is not to raise equity capital, or (v) any payment of dividends on the issuance Preferred Stock or interest on the Debentures in shares of securities in connection with an equipment lease financing transaction Common Stock or a bank financing transaction approved by the Company’s board of directors, a primary purpose of which is not to raise equity capital; (vi) the issuance of warrants to IRG or Xxxxxx and Xxxxxxx, Inc., or Shoreline Pacific LLC, or their respective assigns, shares of Common Stock in connection with the engagement letters dated February 13, 2003, July 8, 2003, and May 9, 2002, respectively, as amended to date; or (vii) the exercise of or conversion of any convertible securities, options or warrants issued and outstanding pursuant to subclauses (i), (iv), (v), and (vi) abovea Strategic Transaction.